HSN is a
multi-channel retailer which conducts marketing and sales through a wide range
of third party and private label merchandise sold directly to consumers through
two main operating segments; HSN and cornerstone. The company has refined its
model and established a presence in various distribution outlets such as
television, on-line mobile catalogues, and retail outlets in effort to broaden
its customer base. This wide distribution of sales outlets Reduces risk associated with consumer dependence on a single medium of exchange (one
channel). (Data Monitor 360, 2011)
HSN Is a
retailer and interactive lifestyle network, which offers a wide assortment of
products through its television home shopping programming on the HSN television
network division, and through its business-to-consumer internet commerce site.
The TV network offers 24 hour service, 7 days a week; programming is subdivided
into separately televised segments, which offers a strategically placed host
who presents and communicates information regarding the products featured. The
HSN commerce site sells all of the merchandise offered on the HSN television
network together with favourable products and exclusive merchandise only sold on
HSN.com (Data monitor 360, 2011)
Today HSN is
available in 95 million homes as well as on mobile devices such as the iPhone,
iPad touch, and Android. Consumers are able to watch a live HD feed and place
orders. HSN also uses social media tactics in order to advertise its brand on
YouTube, Facebook, and Twitter (Business Source Complete, 2010).
Cornerstone
consists of a wide variety of branded catalogues and related websites, the base
of which include Frontage, Ballard Designs, Garnet Hill, Smith Noble, The
territory ahead, Travel smith and improvements, including 20 retail outlet
stores. Content provided by Cornerstone’s websites include accessible features
such as decorating tips, measuring and installation information, online design centres as well as an additional feature that allows customers to browse the
related catalogs online. (Data monitor 360, 2011)
Smart Business
models generate cycles that over time, allow them to operate more efficiently
by decreasing costs and increasing revenue. The HSN business model has
grown to become the source of their competitive advantage. Since the HSN
originated in 1992, which served on a local channel called ‘’the home shopping
channel’’ their effort to continually refine and tweak the companies vision and
business model has allowed them to attract the attention of a national
audience in the form of a televised sales pitch to consumers for goods
and services. HSN has been able to develop an innovative business model
to meet the change in regulation, technological change, globalization and
sustainability. HSN has dimensionalized their business for people by creating a
venue where consumers are able to watch their show, and learn about the
products; whereby, celebrities and models are able inspire consumers and gain
confidence in their products. They have revolutionized their delivery system by
integrating a 360 degree platform incorporating television, web, podcasts and
other multimedia content (Business source database, 2007). This strategy was
implemented to help create a lifestyle for customers; their mission on TV and
the internet is to increase their ‘’active’’ customer base and viewership.
Advertising their products is not solely about the product itself, it’s about
the innovators of the products telling the active viewer about how they came up
with the product, what the product can do for them, and where they can see the
product. On HSN’s website each product has a three dimensional view, as
well as interactive tools that give consumers brand specific ‘’how-to’’ videos
designed to allow the customer to be more involved in the motives that drove
the entrepreneur leading to their creation, and how they can benefit each
consumer. These demo videos create longer session length, increased interest,
and a more effective delivery of each products attributes (Business source
database, 2007). HSN’s direct-to- consumer business model gives great ability
to maximize the experience of the customer and create more than just a
transaction relationship. Their non-linear business platform allows HSN to
create experiences across multiple platforms, which creates content that can
live beyond their TV show. HSN essentially creates a lifestyle to a
target demographic, which these customers are able to engage with creating a
want for that product and a much easier product sale (Wall Street Journal,
2009)
HSN has targeted consumers grouped into similar characteristics, needs, or
purchase behavior; the main purpose of their segmentation is to differentiate
their promotional efforts tailored to their particular consumer groups which
they have targeted. The benefit of their segmentation allows HSN to focus on
specific attributes of products that consumers consider when placing an order
through HSN. HSN’s consumers are segmented to coincide with their benefits
sought; these segments are then advertised to in effort to pitch specific products
that will fulfill attitudinal outcomes such as demographic characteristics,
lifestyle characteristics, and psychographic characteristics. Among the
benefits sought by consumers shopping at HSN, quality of products has been the
most frequently identified benefit (Harden, 2008; James and Cunningham, 2009;
Park and Lennon, 2009). Major improvements in sales have come from targeting
female consumers who have integrated themselves in the workforce leaving them
less time to fulfill their shopping habits, but still wish to purchase items
that would normally have to be selected at specific retail outlets. The rise in
female employment along with higher wages and acceptance in the workforce have
given them significant purchasing power and the ability to increase spending
habits on products that will fulfill their needs and interests. Women
place high emphasis when buying items on brand loyalty, perceived value, and
exclusivity which have created a demand for clothing, cosmetics, and
fragrances/ accessories that women desire in order to look good, feel young,
and enhance their image. HSN’s has established that 83% of their viewers are
female with the majority of them being over the age of 40 years old. HSN has
used this targeting strategy to improve its image to these working class women
by eliminating old dormant products and replacing them with new products and
designer exclusives. Increased sales have benefited by targeting this sub
segment of Home-shopping through strategic advertising methods by HSN by implementing
celebrities and hosts to portray products that fulfill these needs, some
examples include,
-
Ivana trump known for her elegance was
featured on the HSN in 2010 to display her new fragrance ‘’scent unsmelled’’
coupled with her known prestige and implied taste that enabled consumers to
become compelled to buy the product (Lydia Fink, 2008).
-
HSN announced partnerships for new collections with well -known fashion
designer David Rodrigues, celebrity
designers Tina Knowles and Tori Spelling, entertainment expert Colin Cowie and Elle Magazine (Mike Duff , 2009).
-
Carol Brodie launched her collection of high
end jewelry exclusively with HSN, in 2011 her $3000 pair of diamond
earrings sold out of 2500 pairs within one display session
(PR News Wire, 2011).
-
In 2010 Mary J blige, who is a famous
musician launched her fragrance called ‘My Life Blossom’’ which sold 100,000
units in 2010 (Business Source Complete , 2010)
-
In 2011 Jennifer Lopez kicked off the HSN’s
34th birthday with her new fragrance ‘’love & light’’ (PR News
Wire, 2011).
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HSN's 34th Birthday celebration continues through July 31 with special
appearances by some of HSN's most famous personalities including: Serena Williams on July 18; Martha Stewart and Tori
Spelling on July 21; Mariah Carey on
July 25; Vern Yip on July 26; and IMAN on July 28 and 30 (Business Source
Complete , 2010)
HSN’s
advertising campaigns are geared towards strengthening its brand positioning,
and clearly attract new customers. They do this by offering exclusive
distribution of certain products, which builds anticipation for that product
not offered on other mediums of exchange. HSN’s advertising campaigns are put
strategically in place to build trust with existing, and future consumers; for
example in 2001 HSN launched a 30 million dollar national ad campaign to
strengthen is brand positioning by introducing an NFL shop merchandise package
with print ads in People magazine, TV guide, and the NFL insider magazine. In
one add a football fan is found with his official NFL football Helmet, and HSN
exclusive, he catches his steak as if it were a football. A voiceover intones
that with every purchase, ‘’you’ll get a rush of adrenaline, absolutely
free’’. The advertisement noted above is to portray that the thrill of
shopping doesn’t stop once you hang up (Monica Hogan, 2001). HSN has
invested in great personalities and they want to expose them to the public; a
big draw to their advertising and promotion has come in the form of sweepstakes
featuring multiple prize packages that range from a 10,000 dollar ring, a trip
to New Orleans, and 2008 Cadillac CTS. HSN will run promotional spots during
high profile events, so it has purchased spots across NBC universal Cable
networks to run during coverage of Olympic games which has a massive number of
viewers tuned in at all times, across several nations.
HSN
revitalized their advertising campaign when they brought inn their new CEO
Mindy Grossman, who initiated a 360 degree change in the company’s product mix
by eliminating old dormant styles and implementing newer products and designer
exclusives. With the help of Mindy Grossman HSN was able gear its advertising
campaign towards a lifestyle programming station by enabling the entrepreneur
to tell stories behind the product and bring it to life in a unique way (Journal
of the International Academy for Case Studies, 2011). HSN knew that the only
way to advance their advertising campaign was to become a leading interactive
multichannel retailer; they achieved this by forming strategic alliances with
company’s such as Apple, launching a new dynamic application which extends the
company’s advertising reach to the millions of iPad users across the
world. HSN will be the single distributor of retail products offered on a
video centric iPad which gives them the perfect platform to deliver a customer
experience relating to trendy entertainment, and lifestyle programming.
The video iPad allows customers to stream live video from the HSN network or
watch previously aired content they may be interested inn; HSN will be the only
retailer to offer 15 video on demand across multiple product categories such as
fashion, jewelry, kitchen, electronics, shoes/handbags, and home accessories
(News RX, 2011). HSN continued to revamp its advertising campaign by announcing
a multi-year partnership campaign with Kraft foods which is the second largest
consumer goods food company in the world today. The program will give the
HSN the ability to sell and advertise cooking products on Kraftfoods.com, as
well give Kraft foods content space on HSN.com and other HSN distribution
channels. The foundation of this relationship ties into HSN’s new vision to
provide consumers with a unique experience in the kitchen through home cooking
ideas matched up with quality cookware; this business partnership led to
continual development of their advertising campaign by matching highly relevant
content (Kraft food network) with interactive shopping which creates a
multimedia platform for new product launches (Vertical News, 2011).
HSN plans to
launch a gaming digital commerce portal in 2011; the launch of this
digital arcade is a strategic move by HSN to combine what people currently do
online more than any other activity which is shopping and gaming. The
multichannel retailor said this year on may 31 that the motif behind launching
their gaming portal is to allow people to play games online while watching the
HSN streaming live video in HD; this will allow them to view the specific item
on air, and view the most recent 15 items aired all in one screen. This
Ecommerce portal will host 25 different variations of games, including
‘’Today’s special jigsaw puzzle’’, ‘’Lights Camera Subtraction’’, and
‘’Crossword Puzzles’’. The arcade will be featured on advertising mediums
such as Facebook and Twitter, where players will be able to share their scores
and achievements with Facebook and Twitter friends. The launch of this
platform is to continually develop and differentiate their shopping experience
by implementing content and commerce in an innovative way (Ali Haseeb , 2011).
HSN’s
ultimate goal for future advertising objectives is to produce Brand loyalty by
building awareness across multiple digital platforms and inspire customers to
tune in and make a purchase. They have achieved this by giving consumers a more
effective delivery system, and more options and platforms to exchange their
cash for goods on; they are now a store, a network, and an online store all in
one. The home shopping network has been able to influence the market into
revolutionary buying habits by combining innovative platform shopping, with
exclusive brand recognition, and creating an exciting shopping experience
centered on the popular personalities that headline these products.
The home shopping network has expanded into other countries in the world; they
sell and advertise their products on TV, Catalogs, and the internet (HSN.com).
In effort to gain brand recognition with culturally diverse nations HSN has
partnered with ‘’Look Good….Feel Better’’ campaign which is national public
service program that helps women with cancer manage their battle with the
disease. Through this program, volunteers and beauty professionals teach women
fighting cancer techniques that help maintain their physical presence against
the side effects of their treatment. HSN will host three live on air
events featuring notable beauty brands and will donate $5.00 from the purchase
of every product sold. The’’ Personal Care Products council foundation’’ will
advertise the ‘’Look Good….Feel Better’’ campaign on a national scale in effort
to raise as much capital for the foundation as possible. The Personal Care
Products Council is the leading national trade association representing the
global cosmetic and personal care products industry, which is a very strategic
partnership acquired by HSN in order to promote their brand and show that they
care about the worldwide community (Google Finance, 2011). In the Home Shopping
marketplace today HSN will be able to expand its advertising medium to their
target demographic in other countries with the use of web and GPS-enabled
phones, Viral Marketing and additional fun mobile phone Apps; all ways to cost
effectively reach consumers in the future. Loyalty schemes, vouchers and
rewards through social media platforms are very common in Japan, and will
become much more widespread in the United States and through European Countries
in the near future. HSN’s advertisement campaign would benefit greatly in
countries where the women’s employment rate is over 70%; these countries
consist of Norway, Denmark, Sweden, and Thailand which has emerged as the
leading market for employed women with an employment rate of 72% (Passport
GMID, 2011).
If the Home
Shopping Network were to start up today advertising efforts would have to be
capable of establishing presence in multiple retail channels, their effort to
advertise efficiently would lie in their ability to create alternate platforms
for their consumers, creating more options for the user. HSN’s ability to
advertise to consumers lies in their ability to create more than just a
purchase; it would be very important that they create an exciting and
inspirational sales pitch either by introducing products with celebrities,
models, or the entrepreneur of that product who could convey a persuasive
message and create intrinsic value to the customer. Exclusive
distribution of name brand products to consumers would be put in place to
create immediate brand loyalty; in a direct to consumer market such as home
shopping, HSN would have to build strong relationships fast. The importance of
exclusivity cannot be exaggerated in today’s environment; end users are
able to create their own demand by purchasing content on whatever platform they
see suitable for their needs; the internet provides end consumers with an
endless supply of products with varying prices. It would also be
beneficial for the HSN to establish strategic alliances with brands that
provide consumers with digitized tools that can provide a live feed to products
associated with the Home Shopping Network, such as we saw earlier with their
exposure to the iPad. The adoption of new technology within the Advertising
industry has given Home shopping channels a new opportunity to provide
audiences with advertisement options that extend far beyond the advertising
methods of the past. The products that the HSN promote would have to be
complimented by their online presence in giving viewers more options as well as
in catalog format. If the HSN were to launch today, the key factor of
their success would be to have an innovative delivery system of multi-channel
retailing which would allow them to advertise to primary segments, and sub
segments which are currently under-utilized. Multi-retailing channels
would allow the HSN to target more specific segments of the market which would
allow them to advertise products that would directly benefit from these
advertisements. The issue of convenience also plays a major factor in the
decision making process of a target consumer, allowing consumers to place a
purchase on multiple platforms gives a much more effortless and efficient
process which will lead to an immediate increase in sales. If HSN were to
establish a presence today there business model would have to be geared towards
becoming the leader in transactional innovation, by offering live streaming
video on HD, as well as TV online, and mobile devices.
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